By John Reichard, CQ HealthBeat Editor

May 20, 2014 -- In a move similar to one made by Massachusetts, the board of the Nevada health insurance exchange has voted to take steps to drop its contractor, Xerox, and direct residents to the federal website healthcare.gov this fall for 2015 coverage.

The Nevada Health Link exchange would not disappear but would switch to a new, as-yet-undetermined contractor in time for 2016, a spokesman said.

But like repair efforts in Massachusetts and Maryland, task in Nevada will rely on on obtaining additional federal funding, which a number of House and Senate Republicans strongly oppose.

Sign-ups for 2014 have been held to about 36,000 compared to an enrollment target of 118,000, the spokesman said.

CMS spokeswoman Alicia Hartinger said her agency "is committed to working closely with states to support their efforts in implementing a marketplace that works best for their consumers. We are working with Nevada to ensure that all Nevadans have access to quality, affordable, health coverage in 2015."

By Ben Weyl, CQ Roll Call

May 20, 2014 -- Medical debt may be unnecessarily weighing down consumers' credit scores, according to a new report by the Consumer Financial Protection Bureau (CFPB), potentially costing them thousands of dollars when seeking loans like home mortgages.

Many credit scoring models currently in use don't treat debt incurred for medical costs differently than other type of debt. The CFPB thinks that's a mistake.

The study released last week shows that consumers who owed medical debt generally paid back their loans or bills on par with consumers with credit scores about 10 points higher.

The report also found that consumers who subsequently paid medical debt that had gone into collections were as likely to pay back their debts as people with credit scores of 16 to 22 points higher.

One likely reason is that unlike a failure to pay a credit card bill, medical debt often results from unpredictable events and doesn't necessarily stem from an inherent lack of creditworthiness.

The bureau reached its conclusions after reviewing 5 million credit records, looking at the credit histories and scores of anonymous consumers in September 2011 and then examining their actual loan payment patterns through September 2013.

"Getting sick or injured can put all sorts of burdens on a family, including unexpected medical costs. Those costs should not be compounded by overly penalizing a consumer's credit score," said CFPB Director Richard Cordray. "Given the role that credit scores play in consumers' lives, it's important that they predict the creditworthiness of a consumer as precisely as possible."

The bureau is the first federal government agency to supervise credit reporting companies, but for now, it is not preparing regulatory action on the matter, a senior CFPB official said.

Instead, the official told reporters on a conference call, the bureau is simply trying to inform the debate over how medical debt is treated.

Still, if credit bureaus don't change course, it's quite possible the agency may eventually require them to change their scoring models.

By Kerry Young, CQ HealthBeat Associate Editor

May 19, 2014 -- Medicare recently announced a final rule that will make changes to two programs through which private insurance companies are paid to manage medical services for the elderly: the Advantage general heath and the Part D prescription-drug plans.

The rules are projected to save about $1.62 billion in the decade that ends in 2024, the Centers for Medicare and Medicaid Services (CMS) said in a statement.

"The final rule will give CMS new and enhanced tools in combating fraud and abuse in the Medicare Part D program so that we can continue to protect beneficiaries and taxpayers," said CMS Administrator Marilyn Tavenner in a statement.

CMS had drawn more than 7,500 public comments on a draft version of planned changes that was released in January. The final version includes a requirement that doctors who prescribe medicines covered by the Part D program enroll in Medicare or have a valid record of opting out, a step that CMS says will ensure that medicines are only prescribed by qualified individuals.

The rule also will allow CMS to revoke doctors and other prescribers' rights to Medicare enrollment, or their authorization to bill the program, if they are found to have abusive prescribing practices.

The new rule also expands the release of unencrypted, prescriber, plan and pharmacy identifiers contained in prescription drug event records, a move that will give the public broader access to such data while still preserving the privacy of Medicare beneficiaries. The rule will not finalize any new criteria regarding drug categories or classes of clinical concern, and "will maintain the existing six protected classes," CMS said.

By John Reichard, CQ HealthBeat Editor

May 19, 2014 -- The turnaround of the troubled federal health exchange website proved that focused CEO-type attention could fix tough, complex problems.

But with reports surfacing over the weekend that problems persist, it's doubtful the Obama administration fully absorbed that lesson. And its appointment of Kristie Canegallo as deputy chief of staff for policy implementation may only be a partial move to limit the damage.

The Washington Post reported last week that the Department of Health and Human Services is months away from having an efficient system in place to verify the incomes of people seeking insurance subsidies and to resolve questions about the immigration status of applicants.

Many other implementation challenges remain, such as assuring that people who applied months ago for enrollment in the expanded Medicaid program are actually getting coverage.

The White House portrayed Canegallo's appointment as evidence it had learned lessons from the federal website fiasco.

"The President has directed that whenever we go through a major event, we capture the lessons learned so that we don't repeat them, and that we adapt," White House Chief of Staff Denis McDonough said in announcing Canegallo's new post.

"Given our experience with healthcare.gov, we have determined we need more senior-level focus on implementation and execution. I have worked with Kristie since October 2010 and have found her to always be the most prepared person in the room."

Canegallo is no stranger to healthcare.gov. White House background materials say she spearheaded implementation work after the failed Oct. 1 launch, synthesizing technical, operational and policy work.

That job description is at odds with the recommendations of a new report by the Center for American Progress.

It suggests a management structure to oversee health law implementation "similar to many major corporations with a chief executive officer overseeing the federal and state marketplaces and a board of directors holding the CEO accountable."

The report from the left-leaning think tank recommends a management structure that "empowers a single leader that is accountable for all of the implementation, not just the website. The structure should integrate technology, policy, and business decisions; coordinate seamlessly with states and insurers, as well as the many federal agencies involved in implementation; and foster transparency and accountability."

The report praised the work of the healthcare.gov crisis management team led first by Jeffrey Zients and then former Microsoft exec Kurt DelBene, whose appointment could end in June. But "it is unclear whether decision-making authority resides with the White House, the Centers for Medicare and Medicaid Services, or the secretary of Health and Human Services," the report says.

It also noted that all state exchanges empower a CEO or executive director accountable for their management. This structure doesn't by itself assure success "but it is a necessary condition for success," the report adds.

Such a structure could yet materialize in the federal government. But Canegallo's appointment does not by itself put in place the structure and focus required for a smoothly functioning health law. And with continuing and complex implementation challenges ahead for months if not years to come, a higher powered approach may be need to fully absorb the lessons learned.

By John Reichard, CQ HealthBeat Editor

May 19, 2014 -- A survey of major players in the health care system overwhelmingly finds that comparative effectiveness research (CER) to identify the best performing drugs, medical devices and procedures and the optimal way to organize how health care is delivered, is having little impact so far.

That might seem like a terrible piece of news given the billions of dollars the health care overhaul (PL 111-148, PL 111-152) has committed to the field. But the groups surveyed generally are optimistic that the research will eventually bear fruit.

The survey is one more piece of evidence tempering hopes for a big payoff from the field of CER in terms of "bending the curve" in health care spending growth.

The survey was conducted by Scientific & Social Systems on behalf of the National Pharmaceutical Council, a policy research organization funded by drugmakers worried that CER will be used by payers to make "one size fits all" decisions about what products and procedures to fund.

A total of 110 organizations including researchers, employers, trade groups and insurers were polled between Aug. 13, 2013 and Jan. 31, 2014.

A full 84 percent of respondents said the research had little impact on health care decision making in the prior 12 months. However, 92 percent said they expect the research to have a moderate to substantial impact on health care decision making in the next five years.

The survey also found that the research institute established by the health law, the Patient Centered Outcomes Research Institute (PCORI), is a central force in the field.

Seventy six percent of those surveyed named PCORI as the leader in setting research priorities in the field over the next five years, followed by the National Institutes of Health (66 percent), and that Agency for Healthcare Research and Quality (62 percent).

By John Reichard, CQ HealthBeat Editor

May 22, 2014 -- An administration proposal this week to ease the deadline for providers to adopt upgraded electronic health records was greeted with relief by hospitals and some other providers while consumer groups reacted with resignation.

The decision to delay "2014 compliant" systems by doctors and hospitals enrolled in the Medicare and Medicaid programs should be used to strengthen requirements to assure consumers benefit from the technology, said Debra Ness, president of the National Partnership for Women & Families.

The delay acknowledges the difficulties hospitals have encountered obtaining compliant systems, federal officials said. Current requirements call for hospitals to have such systems operating for at least one quarter of fiscal 2014, which ends Sept. 30, effectively requiring the systems in place by June 30.

Fiscal 2015 reimbursements would have been cut below a base payment rate for services delivered if facilities didn't have the systems operating by this summer. Conversely, those with systems in place by the designated time would have qualified for bonus payments above the base rate.

Hospital operators say that all too often, the 2014 edition systems aren't available from vendors.

"The steps we are announcing today will give new options to those who, through no fault of their own, have been unable to get the new 2014 edition technology, including those at high risk, such as smaller providers and rural hospitals," Karen DeSalvo, the national coordinator for health information technology at the Department of Health and Human Services, said this week.

The proposal allows providers to use 2011 edition electronic medical records this year in order to qualify for fiscal 2015 bonus payments and avoid penalties.

Beginning in 2015, eligible hospitals, doctors and other caregivers would be required to use 2014 systems.

The Centers for Medicare and Medicaid Services had notified hospitals they could avoid 2015 payment penalties by filing for hardship exemptions if they couldn't find 2014 compliant systems. But hospital officials complained that exemption status would cut them out of payment bonuses.

"The American Hospital Association welcomes this proposed rule and the enhanced flexibility it would provide," said Rich Pollack, the trade group's executive vice president.

The 2009 economic stimulus law (PL 111-5) provided for billions in Medicare and Medicaid payments for electronic health records, spurring their adoption throughout the health care system. But providers have to attest they are making "meaningful use" of the technology. The requirements ramp up in three stages, with deadlines varying based on what year providers first begin getting bonus payments for health IT.

"Without the flexibility the proposed rule offers, many, if not most, hospitals would not meet meaningful use in fiscal 2014," Pollack said. That "would be a setback to the movement toward widespread adoption of these new technologies."

Consumer advocates are less pleased. "While this proposed delay gives some parties time they need to overcome difficulties, it also means patients will have to wait longer for better access to health information, better care and better health," Ness said in a statement. Those were things "they deserved and expected this year."

"We recognize that the work is not simple or easy but at the same time, it is disappointing that, once again, patients and families will have to wait," she added.

The proposed rule also would make formal a previous statement by federal officials that they will extend the second stage of compliance with the health IT directive through 2016 and begin stage three in 2017.

"By extending stage two, we are being receptive to stakeholder feedback to ensure providers can continue to meet meaningful use and keep momentum moving forward," said Centers for Medicare and Medicaid Services (CMS) Administrator Marilyn Tavenner.

Ness said CMS should use the additional time in the third stage to revisit the recently withdrawn requirements to send patient reminders for preventive or follow-up care. She added that stage three criteria should be toughened to reduce health disparities among ethnic groups. That should be done by including "full access" to electronic medical records in languages other than English, she said.